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Business, 08.08.2019 21:10 angelicadattoli

Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 8%, paid annually. the issue price will be $1,000. the tax rate is 35%. if the flotation cost is 2% of the issue proceeds, then what is the after-tax cost of debt? disregard the tax shield from the amortization of flotation costs. round your answer to two decimal places. % what if the flotation costs were 11% of the bond issue? round your answer to two decimal places. %

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Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 8%, pa...
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